Janne Place [2008] QBCCMCmr 237 (8 July 2008)

Last Updated: 3 September 2008

REFERENCE: 0151-2008

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	8887
Name of Scheme:	Janne Place
Address of Scheme:	70 Kirkland Avenue COORPAROO QLD 4151

TAKE NOTICE that pursuant to an application made under the abovementioned Act by

Raymond McKenzie, the Owner of Lot 9

I hereby order that Raymond McKenzie shall, within fourteen (14) days of the date of this order, submit a motion to the Body Corporate for Janne Place seeking approval for the installation of air conditioning units on common property. I further order that the Body Corporate for Janne Place shall call and convene a general meeting of the Body Corporate within three (3) months of the date of this order for the purpose of considering the motion submitted by Raymond McKenzie, along with any other motions validly submitted. I further order that the Body Corporate for Janne Place shall provide a copy of this order and statement of reasons to all lot owners in the scheme within seven (7) days of the date of this order.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0151-2008

“Janne Place” CTS 8887

Janne Place community titles scheme 8887 (Janne Place) consists of nine lots and common property. The community management statement (CMS) for Janne Place indicates that the Body Corporate and Community Management (Standard Module) Regulation 1997 (Standard Module) applies to the scheme. Department of Natural Resources and Water records show the scheme is registered as Building Units Plan 6332.

APPLICATION

Pursuant to the Body Corporate and Community Management Act 1997 (Act), this application was made by Raymond McKenzie, Owner of Lot 9 (applicant) on 25 February 2008. The applicant sought orders against the Body Corporate for Janne Place (respondent) in the following terms:

I am seeking a direction that I be allowed to proceed with the installation of the proposed air conditioning units on the roof of the complex directly above my unit.

(As required by the regulations, I am prepared to provide indemnity for any damage, which may be directly caused by this installation.)

PROCEDURAL MATTERS

Initially the applicant lodged a conciliation application. In November 2007 the Commissioner’s Office conducted a conciliation session to assist in the resolution of this dispute. An agreement was reached between the parties but it seems this did not resolve the dispute. Subsequently this application was lodged.

Under section 243 of the Act, a copy of the application was provided to the Body Corporate, with an invitation to the Committee and all owners to respond to the matters raised by the application. Submissions were made by the Secretary on behalf of the Body Corporate Committee and by the Owners of five lots. The applicant inspected the submissions received and made a written reply.[1]

A dispute resolution recommendation was made referring the dispute to departmental adjudication.

MATTERS IN DISPUTE

The application relates to the applicant’s request to install air conditioners servicing his lot, with the external unit located on common property. The circumstances of the dispute, as outlined in the application, submissions and reply to submissions, can be summarised as follows.

The applicant says that:

• On 12 June 2007 he received a quote to install three reverse cycle wall mounted split air conditioners. One, for the living area, had a cooling capacity of 7.4kW and a heating capacity of 8.0kW. The other two, for the bedrooms, each have a cooling capacity of 2.5kW and a heating capacity of 3.15kW.
• The quote, along with a sketch plan of the lot showing the proposed location of the three units on the roof above the lot, was forwarded to the Body Corporate Manager (BCM).
• On 6 July the BCM forwarded the documentation to owners with a voting paper, to be returned by 20 July 2007, indicating whether owners accepted or rejected the applicant’s request to install the air conditioners at no cost to the Body Corporate.
• On 13 July the Chairperson asked the BCM to set aside the proposal until it could be discussed by all owners. It was proposed that the Committee meet following the Annual General Meeting (AGM) on 31 July, with all owners invited to attend.
• The applicant says the BCM told him that concerns existed regarding noise and condensate disposal. On 20 July the air conditioning contractor advised in writing that noise would not present a problem and that condensate could be dealt with.
• The Committee meeting minutes of 31 July discussed responsibility for damage to the roof, any precedent set by Lot 8’s single air conditioner on the roof, roof mounting, and noise and screening if the unit was placed on the patio. The applicant undertook to provide more information on the proposed mounting. The applicant says the meeting did not object to air conditioning, just the installation and Body Corporate responsibility for damage to common property. It was suggested that the approval of the unit in Lot 8 was a mistake and the applicant was asked to consider installation on a side wall or balcony.
• On 8 August the applicant received correspondence from the contractor giving detailed information on the proposed installation.
• A further Committee meeting was held on 30 August. A query was raised about whether the contractor was licensed which was later confirmed. The question of the capacity of the electrical system was also raised. The minutes indicate that the applicant would undertake further investigations and then a further Committee meeting would be held prior to a summary of information being sent to owners to vote on.
• The applicant determined that opposition to his proposal would be ongoing and proceeded to lodge a dispute resolution application.
• Conciliation occurred on 23 November.[2]
• On 25 February 2008 the applicant lodged this application, believing that the outcomes of the conciliation were not being met by the Body Corporate.
• A Committee meeting was convened for 6 March to consider correspondence from an electrician. However the applicant says that this ‘report’ fails to provide the current and potential capacity of the scheme’s electrical system or other requested information.
  

The applicant argues that his proposal should be allowed. He says that the roof mounting will enable the external units to be kept close to the internal units. He asserts that this will avoid noise nuisance to owners. He notes a precedent has been set by the air conditioner in Lot 8, which is mounted on the roof and has caused no problem. The applicant says that mounting on the balcony would not be suitable because they would be visible from the front of the scheme, the balcony is too narrow, it might be heard from Lot 5, and it would involve a long pipe running between the internal and external units.

The applicant also includes a letter from the air conditioning contractor dated 4 March 2008 indicating that the smaller air conditioners proposed for Lot 9 use less than 10 Amps which can be provided from any normal power point, and do not affect the requirements from the sub board and the main board, and the sub board has the capacity to add this load to the unit.

The Committee meeting on 6 March 2008 discussed the conciliation session and the report from the electrician. It was agreed that as the electrician’s letter did not clarify the capacity of the building’s electrical mains, and that such a test was required. The applicant’s offer to test the mains himself was not accepted. The minutes indicate that a vote of Committee members was not called because the applicant had not provided certain requested information.

The meeting resolved to propose to the applicant that an assessment of the electrical capacity be undertaken with half the cost contributed to by the Body Corporate, to a maximum of $400, and the remainder by the applicant. The meeting also planned to call an Extraordinary General Meeting (EGM) on 31 March 2008. The EGM was later cancelled, apparently because the applicant had not given a response agreeing to pay half of the electrical assessment. A further Committee meeting was held on 1 April 2008 and agreed to pay the full cost of up to $800 for an electrical assessment.

At that meeting the Committee also approved a motion that the applicant be allowed to place one 8kW air conditioner on the lot above his unit, subject to three conditions. The conditions were that the unit be situated at the front of the building away from bedrooms; that to avoid the risk of rust, the condensate be discharged via a PVC pipe into the roof’s downpipe and not into the guttering; and that the approval be dependent on their being sufficient electrical supply for all owners to install a similar air conditioner.

Submissions

The submission by the Secretary on behalf of the Committee sets out the conditional approval for a single air conditioner agreed to on 1 April 2008. A copy of an electrical engineer’s report, dated 31 March 2008, into the capacity of the electrical system is included in the submission and the Committee says this report creates concern regarding the installation of air conditioners.

The report suggests that, while there is some spare capacity in the power supply for each unit (with the calculations for each unit appearing to allow for split system air conditioning), the power supply to the building is limited and unable to accept additional load. The report recommends that if air conditioning was installed in any unit, the entire system should be upgraded so that any or all other unit owners could also install air conditioning. There is no quote for an upgrade but the report suggests the costs would be ‘relatively high’, with disruption of power to lots, and a partial upgrade to one or two lots would be impractical because of the high cost and limited benefit.

The submission from the Chairperson and Co-owner of Lot 2 opposes the application. She says:

• The current and potential capacity of the electrical system needs to be known before the Committee can make recommendations to owners.
• Additional electricity demand for the applicant’s personal use will disadvantage other owners.
• Lot 8 has the only air conditioner in the scheme.
• She did not say that the approval of the air conditioner in Lot 8 was a mistake, but that voting on that issue was done by mail so owners did not have the opportunity to discuss it.
• She disputes that other owners won’t be affected by the proposal and says the external units are to be located in the same area as 11 bedrooms.
• Units on the front balconies would be away from bedrooms, more accessible for maintenance, less visually offensive than existing barbeques, and avoid roof damage.
• She was initially told that Energex could do a free assessment of the electrical supply but after applying for this, a month later was told they no longer do such assessments.
• She understands that a comprehensive electrical assessment would cost around $700 and that an electrical upgrade would be some $20,000 which owners cannot afford.
• The Committee met as soon as information became available but the applicant has not provided further information which he said he would.
  

The Owners of Lot 1 have no objection to the applicant installing an air conditioner on the roof if the electricity supply has the capacity to cater for all units. They say that if the supply is not adequate the electrical system will need to be updated. They note that the applicant would be responsible for any damage to common property.

The Owner of Lot 3 says that after three meetings, no decision has been made because they are waiting from a report to see if the present power supply can carry the load. She is concerned that the units will be close to her bedrooms and could disrupt her at night. She is also concerned that if all lots put the same number of units on the roof it would be unsightly.

The Owner of Lot 6 (who is also a Committee member) says she has no objection to the concept of air conditioning and may wish to apply to install it in her own lot in the future. She would be very concerned at personally facing the cost of increasing the electrical capacity, and supports the obtaining of a report on load capacity. She also supports the applicant having one air conditioner, installed in the centre front of the rooftop to limit noise disruption. She understands that one 8kW system could propel air through different routes through a split system and so could air condition various rooms in Lot 9. She sees this as preferable to three separate units.
The Owner of Lot 7 (who is also a Committee member) acknowledges that it has been a slow process but argues the delays are not attributable to the Committee alone. He comments on the reasons for some of the delays and does not believe there has been unjustified obstruction to the proposal. He acknowledges that some of the earlier concerns raised have been addressed with satisfactory explanations. He says it would be unfair for other owners to be faced with huge infrastructure outlays to install air conditioning because the applicant had absorbed the available power capacity. He personally accepted the cost of obtaining an electrical report. In regard to the ‘precedent’ in Lot 8, he notes that there is only one unit in that lot and there were concerns with the process for the approval of that air conditioner. He argues that he has been advised that a single 8kW system should be sufficient to service a unit the size of Lot 9, as it is for the larger Lot 8.

The applicant’s reply to submissions includes the following comments:

• He accepts the contractor’s assessment that the air conditioners would not unduly load the electricity supply. From his own calculations he believes the current system is adequate, depending on the actual load of the unit in Lot 8.
• The three units are proposed for greater efficiency, so that the occupants may use only a smaller bedroom unit at night which will assist in reducing noise.
• Installing only one unit on the roof would require ducting.
• He proposed roof installation as the best way of avoiding noise. On the roof the units will be above window level, at a similar distance from a neighbour in a suburban situation. However he would be happy to move the rearmost unit to the other wall to further reduce noise.
• Over five years there have been no complaints about noise from the air conditioner in Lot 8.
• While all owners have a right to raise concerns, that should have been done at the first meeting so they could all be dealt with concurrently.
• The continual raising of new issues indicates an intent to delay a vote. He lodged this application to bring the matter to a conclusion.
• Although he contacted the Secretary when it appeared nothing was being done, he was unaware of the difficulties experienced by the Committee in obtaining a report on the electrical system. If he had been made aware he would have delayed his application.
• He objects to the proposal that he provide 50% of an assessment report that the Body Corporate undertook to obtain, particularly as the purpose of the report is to ensure that there is sufficient supply for all owners.
• Although there have been suggestions that approving his application could lead to up to 27 units on the roof, he understands that only second floor units are ever likely to want equipment on the roof because efficiency would be reduced for lower units.
• The installation of air conditioning is essential in this climate and to maintain the value of units, either for and investor owner or owner occupier, and it reflects badly on a body corporate that fails to provide adequate capacity to allow effective air conditioning in all lots.
• As previously advised he is willing to dispose of condensate to the downpipes, which will come from the indoor units and will not enter the guttering.
  

The applicant also comments on the electrical engineer’s report, and asserts that he is qualified to do so because of his experience (detailed in his reply) in the electricity industry. He says he has not had sufficient time to investigate the assumptions made in the report but comments as follows:

• The constraint in the report is based on the main switch rating and that switch is replaceable so a replacement switch will allow an increased load.
• The report is a pessimistic assessment of the current situation, and in the case of his own unit the number of power outlets (including those proposed for the smaller air conditioners), are less that the number indicated, which affects the calculations.
• Other assumptions in the report are accepted but he argues that the calculations need to be reconsidered and he provides some detail of his concerns.
• He believes there is scope to measure the actual present demand.
• From his calculations, if Lot 9 is on a different phase from Lot 8 no action would be required to enable his proposed installation. If and when another owner connected to the same phase as an existing air conditioned unit drawing 10 amps or more wishes to install air conditioning of a similar load, some action may be required.
  

I requested confirmation from the Body Corporate that the only other air conditioner in the scheme is in Lot 8 and the circumstances of the installation of that unit. In August 2002 the Owner of Lot 8 wrote to all owners seeking permission to install an air conditioner on common property. Five owners gave consent, with one conditional on the Owner of Lot 8 undertaking to turn the unit off if it caused a noise problem, with that undertaking applying to all future owners of Lot 8. The Owner of Lot 8 gave this undertaking in writing. Responses were given direct to the Owner of Lot 8, who then installed the unit, and later copies were given to the Body Corporate.

In regard to this additional information the applicant notes that no consideration was given to roof damage or the adequacy of electricity supply when consent was given to the Lot 8 air conditioner, and that there has been no attempt by the Body Corporate to correctly ‘document’ the installation.

JURISDICTION

I am satisfied that this is a matter which falls within the legislative dispute resolution provisions.[3]

Section 276(1) of the Act provides that an adjudicator may make an order that is just and equitable in the circumstances (including a declaratory order) to resolve a dispute, in the context of a community titles scheme, about: a claimed or anticipated contravention of the Act or the CMS; or the exercise of rights or powers, or the performance of duties, under the Act or the CMS; or a claimed or anticipated contractual matter about: the engagement of a person as a body corporate manager or service contractor; or the authorisation of a person as a letting agent.

An order may require a person to act, or prohibit a person from acting, in a way stated in the order.[4] An adjudicator's order may contain ancillary and consequential provisions the adjudicator considers necessary or appropriate.[5]

DETERMINATION

The issues for consideration here are whether the applicant should be entitled to install three air conditioning units on common property and whether the Body Corporate, acting reasonably, would be entitled to refuse permission for any or all of the proposed units.

I do not intend to comment on the alleged delays in the progress of the issues, and the detail of some of the concerns previously raised which have apparently now been resolved. While the delays have been frustrating for parties I see no indication that there was any deliberate obstruction, or that requests for further information were inherently unreasonable in the circumstances. In some cases there may have some miscommunication, personality issues may have intervened on both sides, there has been some misunderstanding of relevant issues and legislative requirements, and inappropriate processes may have been followed. However it seems from the material presented to me that all parties have generally acted in good faith.

Process for approval of air conditioning

There is nothing in the Act or Standard Module that specifically prevents an owner installing air conditioning within their lot. There is also nothing in the by-laws contained in the scheme’s CMS which specifically prevents an owner installing air conditioning within their lot.

By-law 1 provides that an occupier must not create noise that is likely to interfere with the peaceful enjoyment of a person lawfully on another lot or the common property. This by-law does not prevent the installation of something that has the potential to create noise. Rather, once it is installed it must be operated in a manner that does not interfere with other users of the scheme.

By-law 8(1) prevents a change to the external appearance of a lot without body corporate approval, unless the change is minor and does not detract from the amenity of the lot and its surrounds. Therefore, if the applicant was to install an air-conditioner in his lot with the external unit on his balcony, he would only require Body Corporate approval if the visual appearance of the installation detracted from the amenity of the scheme. Although the issue has not been specifically argued in this application, the indication from the submissions is that some opponents of the application think installation on the balcony would be preferable and have minimal visual impact. I do not intend to make a determination on that question but it may be, therefore, that no Body Corporate approval would be required for the applicant to install air-conditioners that were entirely contained within the boundaries of his lot.

However, because the applicant seeks to put part of the air conditioners on common property, this amounts to an ‘improvement’ to common property.[6] Section 114 of the Standard Module provides as follows for the approval of an improvement to common property by a lot owner.

114 Improvements to common property by lot owner—Act, s 159

(1) The body corporate may, if asked by the owner of a lot, authorise the owner to make an improvement to the common property for the benefit of the owner’s lot.

(2) The improvement must be authorised by special resolution of the body corporate unless—

(a) the improvement is a minor improvement; and

(b) the improvement does not detract from the appearance of any lot included in, or common property for, the scheme; and

(c) the body corporate is satisfied that use and enjoyment of the authorised improvement is not likely to promote a breach of the owner’s duties as an occupier.

(3) An authorisation may be given under this section on conditions the body corporate considers appropriate.

(4) The owner of a lot who is given an authority under this section—

(a) must comply with conditions of the authority; and

(b) must maintain the improvement made under the authority in good condition, unless excused by the body corporate.

Unless and improvement falls within the scope of the three conditions in section 114(2), a special resolution will be required. Otherwise, a committee resolution or an ordinary resolution at a general meeting would be sufficient.

The definition of a ‘minor improvement’ in section 114(2)(a) is one with an installed value of $250 or less.[7] This proposal does not fall within the scope of a minor improvement and so a special resolution is required. Clearly the Body Corporate has not yet considered a motion for a special resolution to approve the air conditioners.

Relevant considerations

The applicant’s proposal has yet to be properly considered by the entire Body Corporate. Therefore, I consider it is necessary for the proposal to be put to a general meeting in the first instance and allow all owner to vote on it. I do not consider that it would be appropriate for an adjudicator to interfere with the Body Corporate’s decision-making role in this regard.

However, the Body Corporate must act reasonably in making decisions for the scheme[8]. Therefore, when deciding how to vote on a special resolution to use this area of common property for air conditioners, the Body Corporate must only consider relevant issues. I have outlined below what I consider to be the relevant and irrelevant considerations that owners can have regard to.

This list may not be exhaustive but it addresses those issues which have been raised by the parties to date. In the absence of any information to the contrary, I have assumed that the roof area is not being used, or expected to be used, for any other purpose.

Damage to the roof

While the issue of potential damage to common property is a relevant consideration in considering any proposal under section 114 of the Standard Module, in this case there is no evidence that any actual damage is likely. Moreover, any risk of damage can be addressed.

Generally section 109(3)(b) of the Standard Module provides that if any utility infrastructure (such as air conditioning plant) is installed on common property solely to provides service to a particular lot, then the owner of the lot will be responsible for maintaining the utility infrastructure in good condition. However this provision does not necessarily extend to the common property on which the utility infrastructure is installed. Section 114(3) also provides that approval for an improvement to common property can be given with conditions (providing the conditions are reasonable) and it could be reasonable to impose a condition that the applicant and any future owners of Lot 9 be responsible for making good any damage to common property caused by the air conditioners during their installation or their subsequent removal.

Condensation

The discharge of condensation has been raised. This could be a relevant consideration but in this case it seems there is no disagreement. The applicant has confirmed that he will dispose of the condensate in accordance with the Committee requests. If necessary this issue could be included in the conditions of approval.

Visual amenity

The question of any impact to the visual amenity of the scheme is a relevant consideration. However to date I have received little argument on this issue. There is no indication that any owner has concerns with the visual impact of the existing unit, and several owners seem to be willing accept at least a second unit.

The only specific complaint comes from one owner who is concerned that if every lot wanted three air conditioners on the roof it would be unsightly. While a couple of lots are interested in installing air conditioning, there is no indication that there is any likelihood of 27 air conditioners being installed in the scheme. Moreover, the applicant suggests that only the top four units would be likely to want to put air conditioning units on the roof, as it would not be efficient for the lower units. It would not be reasonable to refuse a request because of the total effect of the potential future requests by other owners when it is highly unlikely that such requests will be made.

I have little information on just how visible units on the roof are, and this would need to be carefully considered if this were to be a justification for refusing or limiting air conditioning units on the roof.

Noise

Potential noise from air conditioners is also a relevant consideration, but again there is little detail of the concern in this dispute. There is certainly no indication that any noise is experienced from the existing air conditioner.

The Environmental Protection Regulation 1998 impose conditions regarding noise generated by a number of activities, including the use of air conditioners. Section 6Z of the Environmental Regulations require that noise generated by an air conditioner must not exceed 50 decibels between 7.00am and 10.00pm, and 5 decibels above background noise or 40 decibels (whichever is higher) between 10.00pm and 7.00am.

The applicant’s proposed contractors advise that the proposed units comply with Australian Standards. While I have not been provided with the decibel ratings of the proposed equipment, air conditioners manufactured in recent years may well not exceed standard noise limits, bearing in mind that the noise must be measured from the affected property, and not from the unit itself. Owners could clarify the decibel rating of the equipment. The contractors also note that the mounting of the units would absorb vibration.

If any air conditioners are installed, the applicant (and any future owners of Lot 9) would be bound by the Environmental Regulations, as well as By-law 1 regarding noise and section 167 of the Act regarding nuisance. Therefore unless there was some clear indication that the combined noise of the units was likely to exceed allowable noise limits, noise issues would not necessarily be a reasonable basis to prevent the installation of air conditioners although it may be a justification for conditions on the air conditioners can reasonably be operated.

If there are genuine concerns regarding noise, consideration could be given to conditions on approval that reduced noise impacts. If relevant, this could include limiting the operation of the units overnight, the location of the units on the roof or soundproofing around the units. However, if the conditions affected e reasonable use or efficiency of the units it may be that such conditions could only reasonably be justified if there was evidence of a real risk of noise impacts that could not be addressed in any other way. Another option would be to allow installation subject to an agreement that conditions be imposed if a noise problem eventuates.

Existing air conditioners

Much has been made in this dispute as to whether a precedent was set by the air conditioner in Lot 8. To refuse an application for an air conditioner when other air conditioners have been allowed, when there is no justification for different treatment, may be discriminatory and therefore unreasonable. But it may be reasonable to refuse an application if the circumstances are different and there is good reason to treat the matters differently.

It seems clear that there was no formal approval of the air conditioner in Lot 8, as the proposal was never put to a formal general meeting[9]. Notwithstanding that, informal consent was given by six of the nine owners (including Lot 8), and their votes would have been sufficient to approve a formal motion as a special resolution[10]. Moreover, in the absence of any objection for some six years there has at least been acquiescence to that air conditioner, it would be unreasonable for the Body Corporate to seek to retreat from or alter the basis of the purported approval.

However, the absence of a proper approval for the air conditioner in Lot 8 does tend to lessen the precent value of the informal approval. Moreover, Lot 8 only has one unit. So, while it may arguably be discriminatory to refuse a single air conditioner in Lot 9, the principle does not necessarily apply to the request for three units.

Number of air conditioners

While the applicant has sought three air conditioners, the Committee is only in favour of one. Some owners believe a single 8kW unit would be sufficient for Lot 9. The applicant says three will more efficient as just the smaller and quieter units could be used in the bedrooms at night. He also believes a single unit may require more ducting on the roof. I do not propose to investigate the technical basis for any claims as to whether one or three units would be sufficient or most appropriate. Rather, I simply note that if owners wish to base their decision on these claims they must sure that they have a clear understanding of all the technical considerations. Moreover, unless they are justified by genuine concerns of relevant impact on other owners it would be unreasonable to impose their own personal preferences on another’s domestic arrangements.

Electrical supply

I will now turn to what has become the most substantive issue in this dispute, which is the electrical capacity of the scheme. Several submissions argue that the electrical supply in the scheme is insufficient to allow three air conditioners in Lot 9, or that the installation of the three air conditioners would use up all or most of the spare electrical capacity and mean that no other lots could install air conditioners without exceeding the scheme’s capacity.

The Body Corporate has obtained advice which the applicant has some concerns. I do not intent to investigate the validity of the differing opinions because I do not consider that the question of whether there is sufficient electrical capacity for the applicant’s or any other lot owner’s air conditioners is relevant to my determination. It is certainly important for the Body Corporate to seriously consider the current electrical capacity of the scheme and what action may be needed to ensure that the scheme has sufficient electrical capacity to meet its needs into the future. I encourage the Body Corporate to investigate this matter further, including giving consideration to the concerns raised by the applicant with the report obtained by the Body Corporate. However, I do not consider that the question of whether the scheme is running short of electrical capacity is a valid justification for refusal of a request for the installation of air conditioners by one owner.

A fundamental flaw in the argument that air conditioners in Lot 9 only be allowed subject to their being sufficient electrical capacity is that electricity is used by all owners for a range of purposes, and not just by those lots with and requesting air conditioning. It would be inequitable to refuse an owner to install an air conditioner on the roof primarily because of electrical capacity when there is no restraint (or basis to restrain) any owner installing any other equipment (including air conditioning) within their lot which could use similar or even greater amounts of electricity.

There is nothing inherently unreasonable or excessive about owners using normal domestic electrical equipment such as televisions, dishwashers and air conditioners in their lots. Owners wishing to install air conditioning now or in the future are not the cause of any stretched electrical capacity – they are merely at the end of what has likely been a gradual increase in the electrical use by all lots since the current electrical system was first installed. Individual owners should not be held responsible, nor have their normal domestic activities curtailed, because of a potential shortage that has been contributed to by all lots.

The supply of electricity to the scheme and to lots within the scheme is a ‘utility service’, and all equipment (including cables, switches and so on) delivering that service is ‘utility infrastructure’.[11] Pursuant to section 20 of the Act, the electrical infrastructure in this scheme is common property. Under section 109(1) of the Standard Module the Body Corporate is responsible for maintaining this common property in good condition. This means the Body Corporate is responsible for the cost of ensuring that there is sufficient electrical capacity to meet the reasonable needs of owners, which includes the costs of any necessary upgrades. Moreover, the cost of investigating the need to upgrade the system is also solely the responsibility of the Body Corporate.

In reaching this conclusion I have had regard to a decision of the New South Wales Supreme Court under the equivalent legislation in that state[12]. In that dispute the body corporate (known as an owners corporation) refused an owner access to a common property exhaust ventilation system because there was insufficient capacity in the system. In the decision Justice Gzell found that the refusal was “...wrongful interference with their (the owner’s) right to the use and enjoyment of the exhaust system as common property.”[13] He noted the proposition in another case[14] that “...an owners corporation’s power of management and control of the use of common property does not extend to overriding the proprietary right that a lot owner has in that common property.”

Gzell also found that the owner corporation’s obligation to properly maintain the common property included necessary actions in regard to the exhaust system to “...increase its capacity to service all lot owners ... who might seek reasonable access to the system.”[15]

This case differs slightly in that the Body Corporate is not preventing the applicant from connecting from the electrical system at all. However I consider that the same principle applies in that I do not consider that the Body Corporate can reasonably base a decision as to whether to allow the applicant to use a small area of common property roof for a reason that effectively seeks to restrict the applicant’s right to access common property electrical infrastructure. Moreover, I consider that the Body Corporate is legally responsible for maintaining its electrical access so that there is sufficient capacity to allow reasonable access to the system by all owners.

If there was evidence that the installation of an air conditioner (or any other equipment that is subject to Body Corporate approval) by any owner would immediately exceed the current electrical capacity it could be reasonable for the Body Corporate to ask that installation be deferred until the electrical system is upgraded to avoid immediate disruption to power supply to all lots. But the Body Corporate would then need to progress the upgrade quickly so there was no unreasonable delay. In this case it has already been over a year since the applicant’s first request. Moreover, the evidence presented to me does not suggest that the proposed air conditioner will immediately overload the system. Rather the electrical report suggests that if air conditioning is installed in any lot, and upgrade would be recommended to allow other lots to also install air conditioning.

Voting issues

I am concerned by the purported approval of the air conditioner in Lot 8 occurred by a written vote and the initial intention to vote on the applicant’s proposal by circulating correspondence a voting papers. I am at a loss to understand why the BCM undertook this approach in regard to the applicant’s proposal. While it may appear more practical, there are no circumstances in which the legislation allows the Body Corporate as a whole to vote simply on the basis of a voting paper or correspondence circulated in isolation. While the committee can vote on motions outside a formal committee meeting[16], the Body Corporate as a whole can only vote on and approve motions included on the agenda and voting paper of a properly convened general meeting[17].

Also, while it may be desirable for the Committee to consider an issue and form a view on it before it is put to general meeting, the Committee cannot prevent a matter being put to a general meeting vote because it has reached a decision. The applicant is entitled to submit a formal motion and the matter must be then considered at the next general meeting at which it is practicable to be included[18], with or without a Committee ‘recommendation’. While I appreciate that the Committee may have been seeking to reach common ground on this issue, I do not consider that it has been appropriate to allow over 12 months to elapse without the matter being put to a general meeting.

Conclusion

The question of whether the applicant can install three (or even one) air conditioning units on the common property roof requires a special resolution of the Body Corporate. Clearly this matter has not yet been considered by owners at a general meeting. While I am concerned that this issue has been already delayed for some time, it is not appropriate for an adjudicator to impose a decision when all owners have not yet had the opportunity to vote on the matter.

Accordingly I propose to order that the applicant submit a motion to a general meeting seeking approval for any air conditioners that he would like to install on common property. Pursuant to section 42C of the Standard Module the applicant can include an explanatory note (not longer than 300 words), which could include comment on his justification for the air conditioners and any conditions that he proposes to abide by. The Body Corporate will be required to convene a general meeting within three months of this order to consider this motion. The agenda can also consider any other business that Body Corporate wishes to consider (including, if appropriate, consideration of the electrical system in the scheme).

When voting on the applicant’s motion at the general meeting, owners should have regard to section 94(2) of the Act that requires a Body Corporate to act reasonably, including in making decisions. I have set out above those matters which I consider may be relevant for owners to have regard to. Clearly I do not consider that it would be reasonable for the Body Corporate to refuse the motion on the basis of the impact on the scheme’s electrical supply. However there may be other reasons why the Body Corporate could legitimately refuse the proposal or refuse it without conditions. If the motion is not successful and the applicant considers that the Body Corporate has not acted reasonably in making its decision, the applicant could potentially lodge a further application seeking to overturn the decision arguing that opposition to the motion on that basis.

It may be appropriate for the applicant to consult with the Committee and other owners in preparing his motion, particularly having regard to the information contained in these reasons, so that his proposal is formulated in a manner that is most likely to address genuine concerns of owners and so has the best chance of success. To assist in this I have also ordered that all owners be provided with a copy of this order so that they are aware of all the issues.

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[1] See sections 246 and 244 of the Act respectively

[2] Pursuant to section 252E(5) of the Act, evidence of anything said or done about a dispute in a departmental conciliation session is inadmissible in a proceeding. Accordingly I have disregarded the comments of the parties in the application and submissions regarding the contents of the conciliation.
[3] See sections 227, 228, 276 and Schedule 5 of the Act
[4] Section 276(2) of the Act
[5] Section 284(1) of the Act

[6] The definition of an ‘improvement’ in Schedule 6 specifically includes “a non structural change including, for example, the installation of air conditioning.”
[7] Standard Module Dictionary
[8] Section 94(2) of the Act
[9] The requirements for passing motions will be outlined further below.
[10] See section 106 of the Act
[11] See the definitions in Schedule 6 of the Act
[12] Lin & Anor v The Owners – Strata Plan No. 50276 [2004] NSWSC 88 (12 March 2004)
[13] Gzell J in Lin’s Case at para 56
[14] Young v Owners – Strata Plan No 3529 [2001] NSWSC 1135; (2001) 54 NSWLR 60, citing in Lin’s Case at para27
[15] Gzell J in Lin’s Case at para 47 to 54
[16] Section 35 of the Standard Module

[17] Note section 52(5) of the Standard Module. While section 111 of the Act provide for voting outside of general meetings, this only applies to section 111 of the Small Scheme Module and section 132 of the Commercial Module – it does not apply to schemes under the Standard Module. I note also that under section 103(1)(b) of the Standard Module the Committee can spend an amount over the Committee’s spending limit if all owners have given written consent to the expenditure.
[18] Section 41 of the Standard Module